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4 takeaways on Mayor Wu’s rent control plan from the City Council
There's initial general support for the concept, though specific details are still up for debate.
Housing & Rent Control:
The Boston City Council gave Mayor Michelle Wu’s rent stabilization proposal careful initial consideration at a committee hearing Wednesday, and Council President Ed Flynn said the policy’s main tenet, a cap of 10 percent on rent increases, seems “reasonable.”
Seeking to make good on a campaign pledge, Wu filed the plan to bring a version of rent control back to Boston last week. The practice was abolished statewide following a 1994 ballot question.
Wu’s vision calls for keeping year-over-year rent hikes in check with inflation and cost of living increases through setting the maximum allowable rent increase on the change in the Consumer Price Index plus 6%, or 10% at most, whichever of the two figures is lower.
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The plan also provides for several exemptions, including for owner-occupied properties with six units or fewer, and for new apartment buildings and developments for the first 15 years after the city issues a certificate of occupancy.
Sheila Dillon, the city’s chief of housing, said the measure provides needed protections for renters with balanced policies formed following input from developers, trade organizations, small property owners, tenants, and homeowners, among others.
“People that are suggesting that growth will stop are misleading,” Dillon said, pushing against common criticism that any rent control measure will stunt Boston’s growing skyline. “What the home rule petition does stop, however, is behavior that harms our residents.”
Wednesday’s hearing was the first time councilors spoke publicly on Wu’s controversial plan. Initial reactions showed the petition will face plenty of scrutiny on the council, though no councilor outwardly objected to the concept.
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While council progressives offered there are some areas where the proposal does not go far enough, councilors largely emphasized a need to balance any rent stabilization policies with other affordable housing tools, such as continuing to usher in robust housing production.
Any policy the council advances will need buy-in on Beacon Hill — a component councilors grappled with Wednesday.
“We need to be able to walk this delicate balance both to protect renters from exorbitant year-over-year increases, while also providing small landlords of older housing stock to be able to keep up with capital repairs,” Councilor Gabriela Coletta said. “So to me, I think this proposal is a good start.”
Here are five key takeaways from councilors at Wednesday’s hearing:
Council President Ed Flynn thinks the policy’s rent cap is ‘somewhat reasonable.’ Councilor Kenda Lara disagrees.
According to Tim Davis, the city’s deputy director of policy development and research, between 2012 and 2020, average annual growth for the consumer price index was 1.9%, which means historically speaking, the average annual rent increase cap in Boston would have been 7.9 percent under the proposed home rule petition.
Due to high inflation, last year’s rent increases, for example, would have been limited to a 10 percent raise, Davis said.
Tenants could also appeal increases based on habitability concerns with their units or changes in services, such as the loss of amenities, according to Davis.
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Landlords, meanwhile, would also have the right to reset rents to market rates when changing tenants.
Flynn, the council president, appeared to be receptive to the proposed rate.
“The 6% plus the CPI, that seems somewhat reasonable to me,” he said. “That seems like it’s a compromise.”
Flynn wondered aloud whether lawmakers would look to change the percentage.
State legislators, as well as the governor, would have to sign off on the home rule petition if the council approves it for the law to take hold.
“There could be different outcomes, or they could say that seems reasonable, which I agree with you, I think it’s a very reasonable measure,” Dillon told Flynn. “But the Legislature could decide to change that. That would be very substantial, and that would have to come back to Boston for our approval.”
Councilor Kendra Lara, however, voiced opposition to the formula — she thinks it allows for too much of an increase, calling the 6% plus the Consumer Price Index model “untenable.” She also questioned the accuracy of the city’s data.
“We are not giving people a limit,” she said. “We are giving them an allowance … All of the conversations that we’re having here today have made it very obvious that we’re trying to protect profit while also trying to protect people’s right to have a roof over their head.”
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Dillon acknowledged her office used different data than what Lara was considering, and said she would provide more information on those figures.
“I really believe that while we need tenant protections — and we needed them yesterday — we really do need increased supply [for] a range of incomes, including market [rate], so we do want to make sure that market housing continues to be built in the city,” Dillon said.
Lara said she agreed, but will still like to move the needle on the formula.
“There are things here that are already meant to make sure that we’re not depressing production and all things that I am willing to be supportive of if the CPI plus 6% cap is in alignment with what we’re actually seeing in the city,” she said.
Councilors have opinions — and questions — on the 15-year exemption for new development.
Several councilors honed in on a specific exemption in Wu’s plan that would forgo any rent stabilization for the first 15 years for units in new developments.
City officials contend the measure helps ensure Boston’s building boom doesn’t come to a sharp halt if rent control takes hold, as developers would still have an uncapped financial incentive to see their projects through.
“The home rule petition before you today supports our continued growth,” Dillon told councilors.
But some councilors questioned the thought behind the proposition.
“I’m just curious as to why,” Councilor Julia Mejia said. “Developers should also be accountable in the solutions around stabilizing the rents.”
Councilor Liz Breadon questioned why not set the exemption for a 10-year period.
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“The 15-year exemption seems long from my perspective,” Breadon said.
Davis said the 15-year metric is a bit of a standard practice among policies adopted in other cities. The city will continue to consider whether a 10-year exemption would make more sense, he said.
Coletta has questions partly because of the massive growth of new development her own district has experienced in recent years, particularly in East Boston.
“We have about 8,000 units coming down the pike, and so thinking about that long term, I really can’t wait 15 years to have those sort of protections,” she said.
Additionally, Coletta raised concerns over whether landlords of these properties would raise rents as high as possible in their 14th year.
Dillon said she would have to give that more thought.
Several councilors also questioned or took issue with the idea that the exemption would retroactively apply to newer buildings.
“To me, that is a point of angst,” Councilor Ruthzee Louijeune said. “I understand a 15-year looking forward [approach], but why we want to apply this retroactively is a bit unsettling for me.”
Again, Dillon said she would confer with her team about that issue.
Councilor Michael Flaherty has concerns rent control would actually raise rents more frequently.
Councilor Michael Flaherty has concerns rent stabilization would, in a way, work against its intended purpose of providing affordable housing.
“You could see landlords basically increasing their rent every single year to sort of keep pace with what’s allowable, whereas some landlords — the good landlords — don’t necessarily do that,” he said.
Flaherty also wondered whether the ability for landlords to reset rents back to the market rate between tenants would effect actual change, especially in more transient areas of the city that rely heavily on a revolving door of tenants each year, such as near major colleges and universities.
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“I just think there may be an unintended consequence here when we’re hitting the reset button or we have landlords that normally don’t jack up the rent every single year … [but] now because of these regulations, landlords will be a little more dialed in to make sure that just in case, because they’re regulated, they need to jack up that rent,” he said.
Dillon said the administration believes the rent reset provision would serve as a “relief valve” for landlords — that because landlords would have that option, they would not feel the pressure to consistently raise rents to the legal limit each year.
There’s initial general support for the concept, though specific details are still up for debate.
Some councilors said rent control must be considered in tandem with other mechanisms to stabilize the housing market.
Flynn, for example, also proposed providing a $6,000 tax exemption for property owners who charge $500 a month below market rent.
“I’m a renter in Dorchester,” Councilor Erin Murphy said. “I know firsthand that the rising cost of rent has put pressure on so many hard-working people and their families across the city. I also am seeing firsthand with my young adult children that it’s far more difficult than it should be for our young people — and you know, of all ages — to afford rent in the city or to conceive [of] and consider buying a home.
“And so for me, looking at the data and the history … it shows that new construction and an increase in supply has been the best way to address housing costs,” she continued.
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While councilors have personal opinions on the details of the plan, there still appeared to be general consensus on the need for some form of rent control that works in parallel to those other affordable housing tools.
“I lived in a rent stabilized apartment when I lived in New York … and that was what was able to keep me living in West Harlem for 10 years,” Mejia said. “So there is something to be said about how other cities across the country have managed to keep rent control as one of the tools in their toolkit to keep people stabilized.”
She added, “If we’re really serious about rent stabilizing and keeping residents here, then we need to be unapologetic about what this moment looks like and not just go in with what we believe the State House will approve.”
A second hearing is set for March 2.
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